Chip market springs upward, industry’s profit increases 60%

The operating profits of major semiconductor companies in South Korea are expected to have increased almost 60 percent in the January-March period.

Securities firm FnGuide released the forecast for an on-year increase Thursday, which would take profits to 11.7 trillion won ($10.3 billion).

Samsung Electronics and SK hynix, South Korea’s two largest semiconductor manufacturers, are reported to post stronger profits during the first quarter as demands grow worldwide.

Samsung Electronics, the world’s largest semiconductor manufacturer, is expected to post operating profit of 9.3 trillion won for the first quarter, up 40.4 percent from the same quarter last year.

SK hynix’s operating profit is forecast to surge to 2.2 trillion won, up from 0.56 trillion won a year earlier.

Industry trackers added that the upward trend could persist for another two years. Samsung Electronics’ operating profit is forecast to reach 13 trillion won in the second quarter of this year, an all-time high if achieved, according to Kim Sun-woo, an analyst at Meritz Securities.

“The semiconductor market will continue to expand until 2018-2019 due to the increasing demands and stagnating supply,” said Kim Kyung-min, an analyst at Daishin Securities.

IHS Markit said Chinese semiconductor companies are likely to dampen local firms’ prospects, as they are set to produce more semiconductors in 2019. 

By Shim Woo-hyun (ws@heraldcorp.com)